The key resistance level for the GBPEUR mid-market exchange rate has been 1.15 as this morning marks the 3rd time the currency pair has reached this point in April alone. This puts trading pounds into euros at a 11 day high since its last peak on the 17th. This follows sterling having made consistent inroads against the single currency for the last week where it has risen by near-on 2 cents. With most of the sterling progress having been made at the start of the week, rates have begun to taper off again as the 1.15 level was reached indicating the possibility the rate may plateau at these levels once again. Yet, with a lot of euro data out this week, it may give the pound the opportunity to break through the rate barrier.
Data Releases From the Eurozone This Week
This week the UK is not expected to release any economic data that’s like to insight much volatility this week but the same cannot be said for the EU. The European Central Bank (ECB) Bank lending survey is to come out later today which will be bolstered by the Harmonized Consumer Price Index the following day, giving a detailed insight into the changing costs of living as Europe starts to experience a decline in new cases and deaths suggesting that the Eurozone may have passed the peak of the pandemic.
Continuing into Thursday and Friday will see the Unemployment rate, ECB Interest Rate decision and the significant GDP publications which have the ability to move the GBPEUR substantially as this is one of, if not the biggest release to get an understanding of where the Eurozone is financially. Poul Thomsen, the European Department director for the International Monetary Fund (IMF) stated that GDP forecasts caused by the likely ensuing recession will be predicted at -7% compared to Autumn 2019 estimations that it would lie around +1.5%. This is for the developed nations within the EU. For developing member states, the figures are more closely aligned to GDP contraction of -5%. These figures dwarf the financial crash of 2008-09 and have a strong likelihood of having a negative reaction in the currency markets causing further euro weakness.
Global COVID-19 Numbers to date
In other events, Spain’s Prime Minister Pedro Sanchez is looking to ease lockdown measures on 2nd May to allow people to exercise outdoors and more regular walking, providing that the Coronavirus cases continue to fall. There has been great debate, especially in the Bloc considering its naturally higher population density, as to what type of lockdown easing and when to announce the reduced measures as speculation over a potential second wave of virus cases could spiral events back to what was witnessed back in February and March.
Current outbreak statistics stand at 1.225mn cases and 121k deaths for Europe. For a cases comparison Spain has 209k, Italy with 197k, Germany at 155k and the UK with 152k. Deaths total slightly differently with Italy at 26k, Spain at 23k, France at 22k and the UK at 20k. These results are taken from the European Centre for Disease Prevention and Control.
If you have an upcoming currency exchange and would to discuss how these factors are likely to impact it, get in touch suing the form below I’ll be happy to get in touch personally an discuss your enquiry.